DONG Energy beats forecasts, says project start-ups to rise

Denmark's DONG Energy beat second-quarter profit forecasts on Thursday and said the start-up of more projects and a fall in construction costs would generate more cash, possibly making way for higher shareholder returns in coming years.Reuters | August 11, 2017, 08:32 IST

Copenhagen: Denmark's DONG Energy beat second-quarter profit forecasts on Thursday and said the start-up of more projects and a fall in construction costs would generate more cash, possibly making way for higher shareholder returns in coming years.

That was up from 2.62 billion a year earlier and beat the 3.4 billion forecast by analysts in a Reuters poll.

DONG benefited from a deferred gain of 1.4 billion crowns related to a wind farm stake sale in December being recognised.

It confirmed its forecast for 17-19 billion crowns in 2017 EBITDA from continuing operations, a target it raised this week due to the sale of a stake in a German offshore wind project.

DONG has a strategy of farming down, or selling off, large stakes in wind farms in order to invest the capital into new projects.

In the next couple of years more projects will start producing, raising revenue and making it less reliant on such stake sales.

"When we look 1-3 years into the future we believe that we will begin to generate excess financial headroom," Chief Executive Henrik Poulsen said.

This could allow for increased dividends or buybacks, but the firm will first look at investing in new opportunities while also raising the bar for farm downs.

"Once we have explored additional growth opportunities and considered the need for farm downs should there be additional financial headroom beyond that, it would be distributed back to the shareholders," Poulsen said.

Subscribe ETEnergyworld Newsletter

EESL, a joint venture of PSUs under the power ministry, is implementing the Buildings Energy Efficiency Programme which was launched by power, coal, renewable energy and mines minister Piyush Goyal in May.

MNRE had sanctioned a scheme for setting up 1,000 MW inter-state transmission system (ISTS)-connected Wind Power Projects on 14 June last year with the objective to encourage competitiveness through scaling up of project size and introduction of transparent e-bidding process.